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Active Learning and Research
Active Learning and Research
A longtime activist, sociologist Bob Ross reveals the persistence of sweatshops in the global economy, and encourages his students to confront issues concerning fair labor practices.

Vulnerable Labour in Global Capitalism

The following is the text of a paper prepared for presentation by Dr. Robert J. S. Ross at a conference organized by the Centre for Comparative Public Management and Social Policy, City University of Hong Kong, on "Labour in a Globalising World: The Challenges for the Asia"January 4-6, 2001.

Introduction

This paper addresses a conference title: "Labour and Globalisation: The Challenges for Asia". The Call to the conference continues from the title to suggest a competitive environment in which state policy makers will see their options in the context of "competition from Europe and North America."From my perspective, as a student of the apparel industry in North America and the problem of labor abuse in apparel workplaces worldwide, the Call to this conference poses -- to say the least -- an interesting context.

It may or may not be true -- many westerners have been told it is -- that the Chinese expression "may you live in interesting times" connotes a less than charitable or benevolent sentiment.The globalisation of labour markets, especially in labor intensive industries, promises all of us what we may in time come to see as somewhat more interesting times than we would otherwise prefer. The rapidly extended and intrusively expanding unrestrained markets created in the last thirty years are producing a wild ride that we may in time come to regret. Because this skeptical attitude is not the accepted wisdom of Western economists, editorial writers or policy makers, and because many influential actors world wide see the critics of global capitalism as somewhere between merely sentimental and highly irresponsible, I shall take some pains to lay out the basis of this skepticism in a series of propositions. These propositions form, as a whole, a twin thesis: the current form of global capitalism makes labour more vulnerable to capital; those most at risk are the most vulnerable laborers in any given social order: migrants, minorities, and women.

Global Capitalism creates a global labor market.

In many industries in the world today, national and cultural differences between workers are declining in importance. The skills and wage levels of local workforces and their work discipline -- that is, the cost of labor and the ability of employers to control employees -- are ever more critical locational variables wherever the cost labor is an important calculation for profit and loss. Prudent voices remind us that there are many things besides the cost and discipline of labor that dictate industrial location. But the prudent voices protest too much: wherever labor costs are an appreciable fraction of a product's cost ; or where labor costs in developed countries are major multiples of those in developing countries, even in sophisticated product sectors, the tendency of investors is to view the world as a labor market in which differentiated price is a prominent feature. In passing, I note that in this regard, there is a ferocious antiracist quality about today's global capitalism. The stereotypes about which regions and peoples can make which kinds of products are fading. Car engines are made in Mexico and computers as well as apparel in many Asian countries; simple sewing is done in Los Angles, as well as sophisticated electronic products.

"In 1980," wrote Padmanabha Gopinath, Assistant Director-General of the ILO and Director of the International Institute for Labour Studies, (Gopinath 1998) "[N]early 70 % of the world's labour force were sheltered from international competition by trade barriers, capital controls, and planned trade. By 2000, less than 10 % of workers will be living in countries insulated from world markets. The newly industrialized countries of East Asia are already major actors, and the second tier of industrializing economies of Southeast Asia is now emerging on the scene. By 2000, China, South Asia and the countries of the former USSR, representing nearly half the world labour force, will enter the global market."

Notoriously labour is not nearly so mobile as capital; but production processes can come to laborers in a world with ever more perfect financial markets and more powerful techniques of communication, coordination and transport. Moreover, workers do in fact flow across boundaries towards jobs. Migrants to North America and to Europe from low income sections of the Western Hemisphere and of the European and Mediterranean periphery are quite numerous (Bongaarts and Bulatao 2000: 156-187) and concentrated in industries such as apparel. In such industries, even within economies with relatively low unemployment rates at national levels, the labor supply of newcomers is one that is more readily exploited than resident workers. The combination of these two effects -- work moving to pools of available workers, and workers moving toward metropolitan opportunities, often across borders from poor to rich nations -- creates the possibility of thinking about world prices and working conditions for labor. For millions this threatens a leveling down -- a race to the bottom. For other millions the hope is that it means a leveling up, a process of ascent in world development.

Investment tends to flow where workers' social protections are weaker

Those skeptical about the potential of global capitalism to keep the promise of ascent to all who aspire to it, focus on the social implications of capital mobility. Because capital is notoriously more mobile than labor, and governments are now competing with one another to seduce capital's golden goose to lay its egg upon their doorsteps, public policy has a tendency to cater to capital's requirements. (Ross 1983) So, even the noted herald of globalization, Jeffrey Sachs predicts that:
"the post-tax income of capital is privileged relative to the post-tax income of labour as a result of globalization and especially globalization that leads to openness of financial markets and not just of trade. For example, both evidence and theoretical logic make it quite clear that union wage premia are driven down by the openness of the world financial system and that the ability of capital to move offshore really does pose limits on the wage-setting or wage-bargaining strategies of trade unions which are restrained in their wage demands by the higher elasticity of labour demand. Similarly, I think that, over time, the evidence would show that the burden of taxation falls increasingly on labour and less and less on capital as a result of these changes given that taxation inevitably falls on the fixed factor and is, as inevitably, escaped by the highly mobile factor. At the end of the day, the fact that labour cannot move to the low capital income taxation countries suggests that we will find implicitly, both in terms of incidence, and in terms of choice of tax system, a movement towards a heavier burden on labour taxation and away from capital taxation in the taxation of factor incomes." (Sachs 1998)
The cost of labor is not just a factor of wages and strategic labor relations. It is also conditioned by the social wage and the legal protections which states may or may not offer to workers. Together, the globalization of the labor market and the flow of capital toward lower priced labor and less socially protected labor is restructuring industry on a world scale. (Ross and Trachte 1990)

The International Labor Organization, in a report released in October, 2000 notes that apparel employment has been level on a world scale through the nineties -- but is has dramatically shifted regions. By 1997-98 Asia employed 62% of the clothing workers in the world. To illustrate this shift, consider that in 1980 there were 1.6 million clothing workers in China, and 1.3 million in the United States. In 1997 there were 3.7 million workers in China's clothing industry and in 1998 there were under 800,000 in the U.S. (ILO 2000) Much of this industrial expansion has been in employment for export, and China is the world's largest exporter of apparel. The foreign firms who contract for and build clothing factories in China, however, appear to be duplicating in China a strategy that apparel makers in the United States used in the 1950's. In that era, just prior to the globalization of the apparel industry, manufacturers struggled to maintain profit margins by moving production from the Northern U.S. to the South -- away from unions and more rigorous workers safety and other protections, and towards a lower wage, anti-labor political environment. Now we are told of the tendency for export contracts in China to migrate from environments with more workers protections to those with less rigorous protections, and lower wages. According to widely disseminated reports by reputable NGOs, workers in foreign owned factories in China's apparel export sector frequently face working conditions that fail to meet internationally recognized standards, and fail to follow the People's Republic's own laws. (E.g., Kernaghan 2000; Hong Kong Christian Industrial Committee 2000)

This phenomenon is global. In the late Eighties there were hardly any clothing workers in Nicaragua, to take another example; by the mid nineties there were exports of US $35 million from Nicaragua's EPZ; by this year those exports were about $300 million and 19,000 workers labored in the Las Mercedes Free Trade Zone. The employers of the Zone are fiercely antiunion, breaking both local law with impunity, and rejecting internationally recognized rights of association. (Ross and Kernaghan 2000)

Between nations labor-intensive processes concentrate in nations that are more authoritarian and where civic rights are exercised less vigorously.

Contemporary discourse about the benefits of globalization focuses on success stories. These stories emphasize the rising GNP/capita in national economies open to world trade or where political leaders actively invited sweatshop industries as launching pads for future development. The economists' anecdotes and the sociologists' studies differ markedly in their conclusions. My colleague Bruce London and I have examined many studies that show that large scale multinational corporation investment in developing economies is associated, in the last thirty years, with declining provision for basic human needs, increasing inequality, and ultimately slowdowns in growth. In our own work we have shown that repression, low levels of civil expression, few strikes, and more inequality characterize those national economies that are more likely to attract investment from global firms. Put another way, our work shows that capital seeks out jurisdictions where workers are more vulnerable due to the national civic framework. However, in general globalization encourages the tendency for capital to engage more vulnerable workers. (London and Ross 1995)

Within nations more vulnerable groups are apt to work in economic conditions far below the normatively accepted standards of those nations.

Wherever globalisation unites, in the same industries, labor reserves of workers in richer countries with those in poorer ones, the tendency is for standards of employment in the richer countries to descend, often sinking below nominally adequate national legal standards. The labor force recruited for such work must, therefore, be impelled by scarcity to accept such employment. This is structurally similar within poor countries as well: global industries will boost or maintain export advantages by keeping labor costs to a minimum. In poor countries the public justification is that these industries gain, and must maintain their comparative advantage in world trade by keeping wages low. This often means recruiting workers who are not able to command normal wages or maintain high labor standards in local terms.

Everywhere, then, in rich countries and poor ones, the labor intensive global industries like apparel and electronics, recruit women workers, rural to urban migrants and immigrants, and discriminated against minorities as those who toil at the bottom of the global production system. In the United States super-exploited workers of the apparel sweatshops are disproportionately immigrant women; among these are disproportionately undocumented or illegal immigrants. (Bonacich and Appelbaum 2000) In Europe, immigrants and those seeking refuge from dangerous and turbulent environments are the most vulnerable too. (Edmonson et al 2000)

In poor countries, it is young girls recruited from country villages who fuel the export industries that in turn fuel the hopes and controversies about world trade. It is these girls and women who in their very bodies and their vulnerability suffer the mortal consequences of their comparative inability to protect themselves in law and practice. At the end of November, 2000, 47 workers, many of them young women, died in a fire in a Bangladesh garment factory: victims of their country's comparative advantage in world trade, just as the 146 young women were victims of the unregulated market of New York City's garment factories of 1911. (The Independent 2000; McClymer 1998 )

The apparel industry exhibits this process with unfortunate clarity. In rich countries, sweatshop conditions of one hundred years ago are reproduced, induced by competition with exploitation in the low income countries.

During the "Uprising of the Twenty Thousand", the 1909-10 strike that began the unionization and reform of the U.S. apparel industry, one of the leaders of the women workers, Clara Lemlich, described conditions in her factory -- not the worst -- as follows:
"There are two kinds of work--regular, that is salary work, and piecework. The regular work pays about $6 a week and the girls have to be at their machines at 7 o'clock in the morning and they stay at them until 8 o'clock at night, with just one-half hour for lunch in that time. ...there is just one row of machines that the daylight ever gets to--that is the front row, nearest the window. The girls at all the other rows of machines back in the shops have to work by gaslight, by day as well as by night. Oh, yes, the shops keep the work going at night, too. ...The shops are unsanitary-- that's the word that is generally used, but there ought to be a worse one used." (In Stein 1977: 12-13)
Eighty-nine years later, in 1996, Nancy Penaloza spoke to the Washington, D.C. "Fashion Industry Forum@ in July. A worker born in El Salvador and employed by a contractor who makes Liz Claiborne suits in Manhattan Nancy addressed a meeting called by Secretary of Labor Robert Reich. She said: "My boss doesn't pay any tax or social security. I work at least 56 hours a week, Monday to Saturday. Sometimes I go 66 hours a week. I make $200.07 a week. If there is a lot more I have to work on Sundays. I never get vacation. I never even get a whole weekend off. Sometimes I have to work on Easter, Thanksgiving and Christmas. The conditions are very bad. My factory is very hot in summer and very cold in winter. My boss is screaming to me all the time. He is always very angry. I can't ask him any questions because I'm afraid he's going to hit me. All the time he hits me working, like that (she gestures hitting her head with her fist). The factory is very dirty. When I am working I'm afraid because there is big rats and mice crawl on my feet." (Penaloza 1996)1

U.S. government data shows that sixty percent of New York and Los Angeles apparel workers are employed under illegal wage and working conditions. Perhaps 400,000 US apparel workers toil under what we define as sweatshop conditions. The way globalization creates this dynamic was sketched by a contractor who spoke to a journalist at the brink of the era when sweatshop conditions returned to New York City after a long generation of relative decency in garment employment. Here is the way that reality looks in New York City's garment industry: the speaker is a "sweatshop" contractor in the late 1970s:
"A manufacturer will tell me he has 2,000 twelve-piece blouses he needs sewn. I tell him I need at least $10 per blouse to do a decent job on a garment that complicated. So then he tells me to get lost‑‑he offers me $2. If I don't take that, he tells me he can have it sent to Taiwan or South America somewhere, and have it done for 50 cents. So we haggle--sometimes I might bring him up to $4 per blouse. Now you tell me, how can I pay someone "union scale" ($3.80) or even the minimum wage (2.90), when I'm only getting $4 per blouse? With overhead and everything else, I may be able to pay the ladies $1.20 per blouse, but that's tops. There's nothing on paper. I get it in cash." (Buck 1979)

The conventional wisdom is that the suffering of workers in the poor countries is but temporary, for they and their nations will experience upward mobility.

Asian examples are often given for optimism in the face of the miserable conditions experienced by exploited workers. Hong Kong, Formosa, Singapore and Korea all experienced high rates of growth through export led industrialization, and some of this trickled down to workers before the Asian financial crises of the late Nineties. (Kristoff and WuDunn 2000) Skeptics ask: can the conditions of 1960-1990 in the Asian "miracle" economies be reproduced elsewhere? Unique conditions were engaged n those times and places. These included American aid and trade concessions given in conjunction with Cold War maneuvers; the advantage of pioneering access to world markets through low wage labor, as distinct from the widespread availability of such labor pools today. The lack of similar recent progress for workers in the Western hemisphere stands in contrast to the model of upwards ascent for nations and working classes as does the more general social science cross national finding of increased inequality and poorer provision for basic needs among nations more penetrated by multinational capital. (London and Smith 1988; London 1990; Shandra, London, and Ross 2000)

Is the rise of inequality a harbinger of success or stagnation? In the contemporary discourse of development there is a pretense to hard-headed realism that argues that the sacrifices of today’s sweatshop workers will produce a more affluent society later. This proposition has an historical analogy in mind, and also a paradigm of political economy.The historical analogy that justifies inaction on the problems of labor abuse is that which projects as inevitable the growth of GNP per capita as it occurred in the older industrial (Euro-American) regions. The later attainment of a working class that by and large has been well-fed, well-housed, and has time for leisure is assumed to follow GNP growth . The further supplements by public policies and private practices that protect workers and their families and communities from the oscillations of markets and the insecurities of business cycles also are benefits, in this version, of some magic hand – they just appear.The implicit advice of both the academic and journalistic sages is almost religious: Be patient. Blessed are all they that wait. (Isiah 30:18; Lindauer 1993; Meyerson 1997)

Lodged within the analogy that depicts as inevitable but slow the melioration of the abuses of vulnerable workers today is a model of how workers ever prosper. This model assumes that workers will prosper more or less automatically, but only afteremployers are enriched. It is a straightforward trickle-down theory of capitalist expansion. Economists Jeffrey Sachs and Paul Krugman have argued that because abusive working conditions are better than no jobs, reformers are wrong to try to change those conditions. (Meyerson1997) The reasoning is not new; Voltaire use it in the 18th century as satire but now it is neoliberal theory:
"...Things cannot be otherwise than as they are; for as all things have been created for some end, they must necessarily be created for the best end. Everything is best in the best of all possible worlds." (Voltaire, 1759)
Will the neoliberal world market allow continued improvements in the level of living of vulnerable workers in global export industries? Yes, answers this view, but only if we leave their employers alone, allowing them to extract 70 and eighty hour weeks, and pay below family reproduction levels, and leave their workplaces as dangerous but inexpensive as they are. This hard-headed view argues for a whole generation of sacrifice when the struggle over the regulation of labor standards is in view; but when the subject of regulating child labor arises, argument is that during the transition to adequate adult wages, the missing contributions of children to family budgets will cause hardship. (Meyerson 1997; Nichols 1993)

The flaw in this reasoning is its reading of history. In every country the ways in which workers escaped from the conditions of the “Satanic” mills of the 19th century was a combination of economic growth, political and social struggles, ands alliances with reformers across classes and often, indeed, across geographies. In the United States, just as manufacturers were arguing the necessity of child labor – after all, workers’ families needed the money – workers and middle class allies were gradually drawing a legal hedge around the workplace to exclude little children. By 1938 child labor was excluded and minimum wages and maximum hours were set. It did take a long time, though somewhat shorter in Western Europe. Lest anyone be complacent about the length of time this took, consider the human cost of the miserable conditions of the turn of the 20th Century. Many an immigrant family in New York City suffered high rates of infant mortality, deaths from industrial accidents and from preventable diseases. In combating these conditions workers and their allies depended on no invisible hands: they formed unions, campaigned for social insurance, for safety laws, for protective legislation, and for political officials who would enforce those laws.

Conclusion

It is a poorly grounded complacency that believes the current growth in world trade will lift the lives and hopes of today’s toilers by the mere fact of growth. Unequal distribution of growth could deprive today’s laborer’s of a share of potential decency. Given that inequality has grown along with neoliberalism, there are strong grounds to doubt that in itself neoliberal growth will produce widespread human welfare. Labour could be excluded globally as it was in the West in the nineteenth century. That I doubt this will happen is not because I have confidence in neoliberal institutions, but because I have confidence that working people will find ways to cooperate across national boundaries as they have within nations in times past. (Ross 1995a, Ross 1995b)

There is a tendency in technical discussions of social policy aimed at protecting vulnerable or excluded groups, in market based economies, to look to state policies that bear on internal or domestic redistributions; the context of global capitalism may be evoked as cause but not targeted for policy. In these times, it may be that policies of nonstate organizations, in particular, labour unions, and also policies made by states, that aim explicitly at the regulation of global capital are at least as important. The big question is whether workers through independent, representative institutions can grow and learn to cooperate internationally; it is they who have the most to lose and the most to gain in considering whether we will, in this century, see a high speed race to the bottom, or, however slower, a common ascent to shared abundance.

We often approach these questions by counting things: wages; hours; injuries. We know of course that as we count we are really talking about the quality of human lives. In the United States, in the era of textile and apparel unionization, after the strike of sewing machine operators in 1909-1910, and close upon the heels of the Lowell, Massachusetts strike of textile workers in 1912, a young poet wrote about the struggle for "Bread and Roses." This poem, set to music in the 1960s, has become an anthem for women workers, and indeed, for all the vulnerable and voiceless, who strive not just for a bit more of the things we can count, but also for dignity, beauty, and gentleness in their lives. It includes these lines:

Our lives shall not be sweated from birth until life closes;
Hearts starve as well as bodies; give us bread but give us roses!

1 Nancy's maximum pay of $10,400 inflated to 1999 ($11,042) is under the poverty level for two persons under 65 years of age. See: U.S. Census Bureau: http://www.census.gov/hhes/poverty/threshld/99prelim.html. The U.S. uses a market basket measurement of poverty rather than a relative income measure.

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